Economy

Snapchat Loses 3 Million Daily Users, But Posts Q2 Earnings Beat

Snapchat Loses 3 Million Daily Users, But Posts Q2 Earnings Beat”

However, the firm reported its first-ever decline in quarterly users.

Snapchat parent Snap reported this afternoon that during the second quarter, the messaging app lost three million daily active users.

Snapchat rolled out a massive redesign to its app in November of previous year that stirred quite a bit of controversy.

Snap lost about 1 million users in each of its three geographic reporting regions: North America, Europe and rest of world.

Snap blamed the decline on the "disruption" caused by its redesign.

Snap also has been redesigning its app to encourage users to interact with more of its ad-supported videos.

In prepared remarks in a call with analysts, CEO Evan Spiegel attributed this drop-off to the app redesign: "While our Monthly Active Users continued to grow this quarter, we saw a 2 percent decline in our Daily Active Users".

He said the company believes it has addressed users' biggest frustrations.

Saudi Arabia's Prince Alwaleed bin Talal announced soon after the second-quarter results that he had finalized a $250 million (roughly Rs. 1,700 crores) deal in May to buy a 2.3 percent stake in Snap.

The beginning of the end for Snap was when Instagram copied their Stories feature in 2016.

Earnings from Facebook and Twitter in recent weeks spooked social media investors by showing issues around data privacy, abusive content and phoney accounts were weighing on user growth and sending expenses higher.

Tuesday also brought the surprise news of a $250 million investment in Snap by the Saudi Prince Alwaleed bin Talal.

Loss per share: 14 cents a share, whereas Thomson Reuters consensus estimate as 17 cents loss per share. Snap later made updates to roll back some of the more unpopular changes, but the damage was done.

On the upside, the company reported second quarter revenues of $262.3m against analyst estimates of $249.8m, up 44% over the same period past year, and a loss of $0.14 earnings per share against a loss estimate of $0.18. After initially shooting up more than 10 percent following the unexpected revenue beat, it then dipped to below its closing price before ticking back up slightly.



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